Five ways to build an effective SME HR function

We have just commissioned research into the extent of SME boss interference into the day-to-day roles of their employees, and the findings don’t make for encouraging reading for HR professionals.

1,000 SME employees were surveyed in small businesses all over the UK and working in a range of different business functions within those companies.

The research found that UK SME bosses interfere in HR more than they do in any other department. 39% of HR workers said their boss micromanaged them, 29% said their boss was unclear when issuing tasks, while 53% said their boss has taken credit for their work.

Finance was the next department that was most interfered with – 38% of SME finance staff said their boss micromanaged them – followed by marketing, with 37% believing they were micromanaged.

So why are SME bosses so reluctant to give up control of the HR function? Almost certainly because it is so important. The right employees are essential to any SME and its future success and growth.

Getting HR right is a true challenge – here are five ways to build an effective SME HR function.

1. Establish and maintain the right culture

A company’s culture is to some extent organic, dependant on the personality of the founder, the preferences of the first few employees and the nature of the sector that SME is in.

Some cultures are very relaxed and casual, while others are more formal. Whichever it is though, it’s vital for employees to buy into this culture and reinforce its values. When staff are happy and feel part of a workplace culture, that’s when they deliver their best work.

It is much harder to change a culture further down the line than it is to establish a strong culture from the start, so getting it right from the off should be a priority.

2. Provide great training

Our research found that micromanagement was an issue in HR, with four in 10 employees saying their boss micromanaged them. This is presumably down to a lack of trust and / or a need for control on the part of the boss.

A powerful way of addressing this is to give HR employees the right training. This sounds obvious, but too many SMEs are guilty of saving cash in the short-term at the expense of longer-term benefits. HR isn’t something that you just pick up – people need to be trained effectively and doing so will help foster the trust that can prevent micromanagement.

3. Build your business (and HR) so it can easily scale

When most SMEs start out, HR isn’t a major priority. Everything is focused on getting the product right, agreeing the proposition and doing a million other things that come with launching a business.

HR can be very informal during this stage and sometimes overlooked. But if you have an inadequate HR function early on, when the business grows any HR issues will grow with it. HR should not be overlooked at the start, even if other things feel like more of a priority, so establish a strong and professional HR function that can grow with the business.

4. Establish smart processes

Processes are the small day-to-day and repeatable tasks that drive every business. They are vital to the smooth running and long-term success of any SME and also the HR function within it.

HR is based on process, from employee onboarding to staff appraisals. Process provides reassurance that tasks are done and that everything is working. So establishing simple and collaborative processes in HR, and then using and improving these on a day-to-day basis will have a big impact on any SME’s HR function.

5. Recruit based on talent, not experience

Many SMES are missing out on real talent, because conventional approaches to recruitment are flawed. It’s too much of a one-way street and the candidate must effectively sell themselves to the employer.

If someone maybe didn’t do so well at school but are still intelligent and has a lot to offer, it is easy to overlook them. When you hire based on talent you’ve a much bigger pool of people to choose from and can have untold benefits to the business.

What tips would you add to this on HR in SMEs? Leave a comment below, we’d love to hear your thoughts.